Del Lago Once Again Begging For A Bailout

Del Lago is once again asking the state of New York for financial assistance. Like the other commercial NY casinos, the one near Waterloo is struggling to stay afloat.

Rochester developer Wilmorite co-owns the $440 million property, which has failed to meet projections since opening last year. His casino recently received a negative rating from Moody Investor Services, warning that the current trajectory is unsustainable.

Without state help or corporate restructuring, del Lago is unlikely to keep its doors open much longer.

Del Lago tries, tries again

According to the Democrat & Chronicle, del Lago co-owner Thomas Wilmot met with budget officers of Gov. Andrew Cuomo earlier this month. Although he wouldn’t confirm it to the press, the governor’s office did. It’s at least the second time property executives have visited Albany to ask for help.

We know they asked for a bailout the first time, because Wilmot said as much: “I think we need some help at this point, and what the future holds, time will tell.”

He’s not talking this time, so it’s not entirely clear what sort of relief he’s seeking. The likely consensus is that del Lago is petitioning the state to reduce its tax burden. The commercial casinos pay back 37 percent of table revenue and 10 percent of slots revenue.

Competing tribal casinos pay no income tax at all, and the Seneca Nation has ceased its revenue-sharing payments to the state. Both the Senecas and the Oneida Nation operate multiple properties in del Lago’s neighborhood.

Padding the tribes’ pockets, Wilmot contends, creates an unfair advantage in the market.

Key lawmaker says no on casino aid

“I think it was a bad business decision to move there in the first place,” Pretlow told the D&C. “But they knew what they were doing when they got into [it]. They made their bed, basically.”

It’s not surprising, then, to hear him repeat that pushback this time around. “If they have a beef, it’s with their consultants who did the numbers,” Pretlow said more recently.

Del Lago’s 2017 revenue of $147 million was about half its projection.

The governor has expressed similar sentiments, and most lawmakers are in agreement. As the chairman of the Gaming, Racing and Wagering committee in his chamber, Pretlow maintains a strong influence on relevant issues.

Those that do have sympathy for the struggling casinos are asking them to open their books to closer inspection if they want a tax break. Del Lago previously argued that creating 1,400 jobs and boosting NY tourism should be worth some sympathy.

Chairman Pretlow does have one idea that might ease some of the financial strain, though.

At a recent board meeting, Acting Executive Director Ron Ochrym said his staff “anticipates being able to provide a draft… in the near term.” They’ve been fiddling with the framework for months, it seems. A spokesperson for the lottery declined to comment on the progress.

Lawmakers spent the session working to broaden the law to include horse racing tracks and off-track betting facilities. But the General Assembly adjourned on June 20 without resolution. Pretlow himself filed legislation, but neither his bill nor any other sports betting bill came up for a vote.

All hope may not be lost, though. This week, Pretlow toldLegal Sports Reportthat he expects regulators to authorize NY sports betting under the existing law before the end of the year. Sports betting revenue certainly can’t fix the whole problem, but it would provide a badly needed band-aid.

Whether or not that comes to fruition, del Lago is limping forward under new oversight. The property recently appointed Mark Juliano, a former Sands executive, as its general manager.

Eric is a reporter and writer covering the NY gambling industry, online poker, sports betting regulation, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.